OFFERING MEMORANDUM DAYS INN LAKE VILLAGE LAKE VILLAGE, ARKANSAS

Transcription

1 OFFERING MEMORANDUM LAKE VILLAGE, ARKANSAS

2 EXCLUSIVELY LISTED BY: JAKE YEE Associate ONTARIO OFFICE (909) License: CA GORDON ALLRED First Vice President Investments Senior Director, National Hospitality Group ONTARIO OFFICE (909) License: CA Confidentiality Agreement The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property. ALL SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. II

3 TABLE OF CONTENTS Executive Summary... 2 Investment Overview... 3 Features and Amenities... 4 Summary of Terms... 5 Property Overview... 8 Regional Map... 9 Local Map Bird s Eye Parcel Map Historical Market Trend T12 Growth RevPAR Comparison STR Comparison Profit and Loss Statement Profit and Loss Summary Year Cash Flow Pro Forma Year IRR Competitive Market Overview Competitive Properties Map Competitive Properties Detail Chicot County, Arkansas Overview Demographic Summary III

4

5

6 DAYS HAMPTON INN LAKE INN WALDORF VILLAGE 912 South Highway 65 & 82 Lake Village, Arkansas OFFERING Purchase Price $2,980,000 Down Payment $596, % Price/Room $53,214 Total Number of Rooms 56 Occupancy 56.0% ADR $67.30 RevPAR $37.71 Year Built Renovated Number of Floors 2 Lot Size 1.57 Acres ANNUALIZED OPERATING DATA ITEM T12 MAY 2017 % OF GR PRO FORMA % OF GR Room Revenue $770, % $786, % Other Revenue $ - 0.0% $ - 0.0% Gross Revenue $770, % $786, % Total Expense $385, % $393, % Net Operating Income $384, % $392, % VITAL DATA CAP Rate - NOI 12.9% CAP Rate - NOI: Pro Forma 13.2% Room Revenue Multiplier 3.9 Room Revenue Multiplier - Pro Forma 3.8 2

7 INVESTMENT Marcus & Millichap has been chosen to exclusively market for sale the Days Inn Lake Village, a two-story limited service hotel located 2.4 miles from Lake Village Municipal Airport. This newer construction, 2-story hotel consists of 56 interior corridor rooms with frontage on U.S. Route 65. Amenities include a heated outdoor pool, spacious lobby, complimentary breakfast buffet and free wireless internet access. Business amenities include a business center and meeting room accommodating up to 100 people. Each guest room is equipped with a flat panel television, work desk with lamp, hair dryer, ironing board, mini refrigerator, microwave and coffee/tea maker. Select suites include a separate living area. Adjoining rooms are available. Location The Days Inn Lake Village is located in Lake Village, Arkansas which is the county seat of Chicot County. Lake Village is named for its location on Lake Chicot, the largest natural oxbow lake in the United States. The city sits in the southernmost section of the Delta Lowlands of Arkansas and boasts scenic vistas of the Mississippi River. According to the United States Census Bureau, Lake Village has a total area of 2.5 square miles, which is all land. Lake Chicot State Park, located in Lake Village, offers cabins, campgrounds, a marina and other recreational activities. The Park s visitor center is full of information and exhibits on area history and natural resources. Nationally known for its ability to produce record large mouth bass, Lake Chicot also offers an abundance of Crappie, Beam and Catfish. Lake Village has nine properties listed on the National Register of Historic Places: Carlton House, Chicot County Courthouse, Sam Epstein House, Gregory Dipping Vat, Lake Village Commercial Historic District, Lake Village Confederate Monument, Lake Village Post Office, Dr. E.P. McGehee Infirmary, New Hope Missionary Baptist Church Cemetery and the John Tushek Building. The nearby Lakeport Plantation is also listed. Franchise Days Inn Worldwide, Inc. is an affiliate of Wyndham Worldwide Corporation. As one of the world s largest hospitality companies, Wyndham offers individual consumers and business-to-business customers a broad range of hospitality products and services across various accommodation alternatives and price ranges through their premier portfolio of world-renowned brands. With more than 55 brands, which include Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Wyndham Rewards, RCI, Landal GreenParks, English Country Cottages, Novasol, Wyndham Vacation Resorts and WorldMark by Wyndham, Wyndham has built a significant presence in most major hospitality markets in the United States and throughout the rest of the world. Investment Summary The Days Inn Lake Village represents the opportunity to acquire a well-maintained hotel in a developing and underserved market near strong demand drivers. Our Pro Forma analysis assumes an investor will increase operating efficiencies through cost management and modest revenue growth. Investment Highlights 12.9% Cap Rate םם Excellent Frontage on U.S. Route 65 םם Close Proximity to U.S. Route 82 םם Less Than 3 Miles from Lake Village Municipal Airport םם 8 Miles from Lake Chicot State Park םם Surrounded by an Abundance of Recreational Activities םם 8%+ Annual RevPAR Growth םם 3

8 DAYS HAMPTON INN LAKE INN WALDORF VILLAGE FEATURES AND AMENITIES NEIGHBORHOOD AMENITIES DINING SHOPPING ENTERTAINMENT COMMON AREA FEATURES Heated Outdoor Pool םם Truck & RV Parking םם McDonald s 243 Feet Dollar General 0.1 Miles Rodney Angel Sports Complex JJ s Lakeside Café 407 Feet Sunflower Feed Store 0.1 Miles Guachoya Cultural Arts Center Subway 0.2 Miles O Reilly Auto Parts 0.1 Miles Lake Village Branch Library Kowloon Restaurant 0.3 Miles Fred s Store 0.2 Miles Central Community Center 0.3 Miles 0.5 Miles 1.0 Miles 1.4 Miles Meeting Room םם Business Center םם Complimentary Breakfast Buffet םם Ice & Vending Machines םם 24-Hour Front Desk םם Free Wireless Internet Access םם Spacious Lobby םם Guest Laundry Facilities םם Safety Deposit Box םם La Terraza 0.3 Miles The Village Market 0.3 Miles Lake Village Country Club 3.2 Miles Church s Chicken 0.4 Miles Barton s 0.5 Miles Lake Chicot State Park 8.9 Miles Rhoda s Famous Hot Tamales 0.6 Miles Nonie s Antiques 1.0 Miles Lakeport Plantation 11.9 Miles Fox s Pizza Den 0.8 Miles Dee s Treasure Chest 2.0 Miles Greenville Nelco Cineplex 20.1 Miles ROOM AMENITIES & Cable Flat Panel Television with םם Premium Channels Work Desk with Lamp םם (suites) Separate Living Area םם Hair Dryer םם Iron/Ironing Board םם Mini Refrigerator םם (some) Adjoining Rooms םם Microwave םם Coffee/Tea Maker םם Telephone with Voic םם Alarm Clock/Radio םם Climate Control םם High-Speed Internet Access םם Cribs Available םם 4

9 OF TERMS INTEREST OFFERED TERMS OF THE SALE TOURS Fee simple interest in the Days Inn Lake Village, a 56-room hotel located at 912 South Highway 65 & 82 in Lake Village, Arkansas on approximately 1.57 acres. The Days Inn Lake Village is offered at $2,980,000 based on a capitalization rate of 12.9%. Historic operating documentation and third party reports can be found in the on-line document data portal. Access available upon request. Prospective purchasers are encouraged to visit the subject property prior to submitting offers. However, all property tours must be arranged with the Marcus & Millichap listing agents. Please do not contact the tenants, on-site management or staff without prior approval. PROPOSED FINANCING FINANCING Loan Amount $2,384,000 Loan-to-Purchase Price Ratio 80.0% Interest Rate 5.5% Amortization Period 25 Years Annual Debt Service Payment (P&I only) $175,678 Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative. 5

10

11

12 THE OFFERING Property Name Days Inn Lake Village Address 912 South Highway 65 & 82 Assessor s Parcel Number Franchise Parent Company Franchise Affiliation Lake Village, AR C Wyndham Worldwide Corporation Days Inn Worldwide, Inc. Year Built Renovated Lot Size 1.57 Acres Number of Floors 2 Total Number of Guest Rooms 56 TRANSPORTATION Highways U.S. Route 65 Airports U.S. Route 82 U.S. Route 278 Lake Village Municipal Airport Miles Mid Delta Regional Airport Miles Dermott Municipal Airport Miles NEARBY ATTRACTIONS Name Rodney Angel Sports Complex Location Southside Street, Lake Village, AR Distance 0.3 Miles Description Lake Village s largest baseball complex hosting state and regional tournaments Name Guachoya Cultural Arts Center Location 1652 U.S. Highway 65 & 82 South, Lake Village, AR Distance 0.5 Miles Description Art gallery containing exhibits and workshops by local artists Name Lake Village Country Club Location 3309 Lakeshore Drive North, Lake Village, AR Distance 3.2 Miles Description A 9-hole golf course with a restaurant FOOD AND BEVERAGE SERVICE Name of Outlet JJ s Lakeside Café Type of Outlet American Restaurant Location 1025 U.S. Highway 65, Lake Village, AR Distance 407 Feet Name of Outlet Kowloon Restaurant Type of Outlet Chinese Restaurant Location 1331 U.S. Highway 65, Lake Village, AR Distance 0.3 Miles Name of Outlet La Terraza Type of Outlet Mexican Restaurant Location 1416 U.S. Highway 65 & 82, Lake Village, AR Distance 0.3 Miles 8

13 REGIONAL MAP DAYS INN LAKE VILLAGE 9

14 LOCAL MAP DAYS INN LAKE VILLAGE 10

15 BIRD S EYE N 11

16 PARCEL MAP 12

17

18

19

20 HISTORICAL TREND % Occupancy ADR Comparison RevPAR Comparison 90.00% % 70.00% % % 40.00% % 20.00% 10.00% % Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 - Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 - Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Subject: 8.1% average annual growth / 4.8 years Subject: 5.3% average annual growth / 0.6 years Subject: 8.7% average annual growth / 4.8 years Comp Set: 5.9% average annual growth / 0.7 years Comp Set: 5.1% average annual growth / 4.8 years Comp Set: 5.6% average annual growth / 1.8 years 16

21 T12 GROWTH 30.0% Occupancy T12 Growth Subject T12 Growth CompSet T12 Growth 30.0% ADR T12 Growth Subject T12 Growth CompSet T12 Growth 30.0% RevPAR T12 Growth Subject T12 Growth CompSet T12 Growth 20.0% 20.0% 20.0% 10.0% 10.0% 10.0% Growth Rate 0.0% Growth Rate 0.0% Growth Rate 0.0% -10.0% -10.0% -10.0% -20.0% -20.0% -20.0% -30.0% -30.0% -30.0% 17

22 R EVPAR COMPARISON 70.0% 60.0% 50.0% Occupancy $80.00 $70.00 $60.00 ADR 40.0% $50.00 $ % $ % 10.0% 0.0% T-12 Subject 38.3% 43.3% 52.7% 52.7% 59.4% 54.5% 60.1% 56.0% Comp Set 54.0% 49.1% 44.3% 41.2% 41.4% 41.6% 38.2% 40.2% $20.00 $10.00 $ T-12 Subject $64.63 $67.34 $69.65 $66.21 $66.39 $65.77 $68.27 $67.17 Comp Set $56.54 $61.17 $63.15 $66.26 $66.80 $71.99 $73.81 $73.63 $45.00 Subject: 8.1% average annual growth / 4.8 years Subject: 5.3% average annual growth / 0.6 years Comp Set: 5.9% average annual growth / 0.7 years Comp Set: 5.1% average annual growth / 4.8 years Annual RevPAR Monthly RevPAR $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $ T-12 Subject $24.75 $29.18 $36.73 $34.88 $39.46 $35.83 $41.00 $37.64 Comp Set $30.55 $30.02 $27.97 $27.28 $27.63 $29.92 $28.22 $29.62 Subject: Comp Set: 8.7% average annual growth / 4.8 years 5.6% average annual growth / 1.8 years JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC T-12 Name City, State Rooms OpenDate Brand Ranking * Guest Ranking ** Rack Rates *** 1 Days Inn Lake Village Lake Village, AR 56 May of 7 1 of Days Inn Greenville Greenville, MS 120 Dec 1965 Equal 5 of Econo Lodge Greenville Greenville, MS 77 Apr 1995 Equal 4 of Rodeway Inn Greenville Greenville, MS 108 Jan 1997 Equal 6 of Super 8 McGehee McGehee, AR 27 Jun 1995 Equal 1 of Americas Best Value Inn & Suites Star City Star City, AR 45 Jan 2003 Equal 1 of Holiday Inn Express & Suites Greenville Greenville, MS 73 Jul 2005 Superior 1 of Total 506 Comments: Comp Rooms 450 * Smith Travel Research brand ranking ** w w w.tripadvisor.com guest ranking *** Rate Survey: FEB & AUG 18

23 STR COMPARISON Occupancy T12 MAY 2017 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Subject Property 38.3% 43.3% 52.7% 52.7% 59.4% 54.5% 56.0% 56.6% 57.2% 57.7% 57.7% 57.7% Competitive Set 54.0% 49.1% 44.3% 41.2% 41.4% 41.6% 40.2% 41.4% 42.3% 42.7% 42.7% 42.7% Market Penetration Index 70.9% 88.3% 119.1% 127.9% 143.7% 131.1% 139.3% 136.6% 135.2% 135.2% 135.2% 135.2% % Change Subject Property 13.2% 21.7% -0.1% 12.8% -8.3% -7.4% 1.0% 1.0% 1.0% 0.0% 0.0% Competitive Set -9.2% -9.8% -7.0% 0.5% 0.5% 0.7% 3.0% 2.0% 1.0% 0.0% 0.0% Market Growth Index 22.3% 31.5% 6.9% 12.4% -8.8% -8.0% -2.0% -1.0% 0.0% 0.0% 0.0% ADR T12 MAY 2017 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Subject Property $64.63 $67.34 $69.65 $66.21 $66.39 $65.77 $67.17 $67.84 $68.52 $68.52 $68.52 $68.52 Competitive Set $56.54 $61.17 $63.15 $66.26 $66.80 $71.99 $73.63 $76.58 $78.88 $80.45 $81.26 $81.26 Average Rate Index 114.3% 110.1% 110.3% 99.9% 99.4% 91.4% 91.2% 88.6% 86.9% 85.2% 84.3% 84.3% % Change Subject Property 4.2% 3.4% -4.9% 0.3% -0.9% 1.1% 1.0% 1.0% 0.0% 0.0% 0.0% Competitive Set 8.2% 3.2% 4.9% 0.8% 7.8% 5.6% 4.0% 3.0% 2.0% 1.0% 0.0% Market Growth Index -4.0% 0.2% -9.9% -0.5% -8.7% -4.5% -3.0% -2.0% -2.0% -1.0% 0.0% RevPAR T12 MAY 2017 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Subject Property $24.75 $29.18 $36.73 $34.88 $39.46 $35.83 $37.64 $38.39 $39.16 $39.55 $39.55 $39.55 Competitive Set $30.55 $30.02 $27.97 $27.28 $27.63 $29.92 $29.62 $31.73 $33.33 $34.34 $34.68 $34.68 Revenue Generation Index 81.0% 97.2% 131.3% 127.8% 142.8% 119.8% 127.1% 121.0% 117.5% 115.2% 114.0% 114.0% % Change Subject Property 17.9% 25.9% -5.0% 13.1% -9.2% -6.3% 2.0% 2.0% 1.0% 0.0% 0.0% Competitive Set -1.7% -6.8% -2.5% 1.3% 8.3% 6.4% 7.0% 5.0% 3.0% 1.0% 0.0% Market Growth Index 19.7% 32.7% -2.6% 11.9% -17.5% -12.7% -5.0% -3.0% -2.0% -1.0% 0.0% Supply / Demand T12 MAY 2017 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Room Supply % Change 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Accommodated Demand 40,483 89,710 83,516 78,389 80,085 79,627 77,523 88,089 89,735 90,632 90,632 90,632 % Change % -6.90% -6.14% 2.16% -0.57% -0.86% 13.63% 1.87% 1.00% 0.00% 0.00% 19

24 PROFIT AND LOSS STATEMENT T12 MAY 2017 Guest Rooms 56 Rooms Available Occupied Rooms 20,440 11,453 Occupancy % ADR 56.0% $67.30 RevPAR $37.71 Dept. Description T12 MAY 2017 % of GR Adjustments T12 MAY 2017 % of GR Comments Code P&L Detail Revenue Room Revenue 770, % 770, % RM Total Income 770, % 770, % Expenses Purchases 3, % 3, % AG Salaries 111, % 111, % RM Travel Expense % % AG Franchise Fees 93, % 93, % FA Insurance 19, % 19, % IN Legal & Accounting 4, % 4, % AG Maintenance - Bldg & Grounds 7, % 7, % PM Office Expense 13, % 13, % AG Utilities 37, % 37, % UT Supplies 59, % 59, % RM Taxes - General 108, % (96,178.56) 12, % Adjust TOT Tax TX Taxes - Payroll 12, % 12, % AG Telephone 9, % 9, % IT Total Expenses 482, % (96,178.56) 385, % NOI 288, % 384, % 20

25 PROFIT AND LOSS T12 MAY 2017 Guest Rooms 56 Rooms Available 20,440 Occupied Rooms 11,453 Occupancy % 56.0% ADR $67.30 RevPAR $37.71 P&L Summary LS 2016 HOST Code Room Revenue 770, % 97.1% RM Total Income 770, % 100.0% Distributed Expenses Room Expenses 171, % 22.4% RM Undistributed Expenses Admin & General 33, % 8.4% AG Information & Telcomm Systems 9, % 0.8% IT Sales & Marketing - 0.0% 5.5% SM Franchise Fees 93, % 4.7% FA Utilities 37, % 4.2% UT Property Operations & Maintenance 7, % 4.7% PM Management Fee - 0.0% 0.0% MR Taxes 12, % 4.5% TX Insurance 19, % 1.0% IN Total Expenses 385, % 55.6% NOI 384, % 44.4% 21

26 5-YEAR CASH FLOW PRO FORMA T12 MAY 2017 Year One Year Two Year Three Year Four Guest Rooms Rooms Available 20,440 20,440 20,440 20,440 20,440 20,440 Occupied Rooms 11,453 11,567 11,683 11,800 11,800 11,800 Occupancy % 56.0% 56.6% 57.2% 57.7% 57.7% 57.7% ADR $67.30 $67.97 $68.65 $68.65 $68.65 $68.65 RevPAR $37.71 $38.47 $39.24 $39.63 $39.63 $39.63 Year Five Change in Occupancy 1.0% 1.0% 1.0% 0.0% 0.0% Change in ADR 1.0% 1.0% 0.0% 0.0% 0.0% Change in RevPAR 2.0% 2.0% 1.0% 0.0% 0.0% Change in Expenses 2.0% 2.0% 1.1% 0.2% 0.2% $ % CPOR PAR $ % CPOR PAR $ % $ % $ % $ % CPOR PAR Revenue Room 770, % , , % , , % 810, % 810, % 810, % ,466 Total Revenue 770, % , , % , , % 810, % 810, % 810, % ,466 Departmental Expenses Room Expenses 171, % , , % , , % 180, % 180, % 180, % ,220 Total Departmental Departmental Profit 171, % , , % , , % 180, % 180, % 180, % , , % , , % , , % 629, % 629, % 629, % ,246 Undistributed Expenses Administrative & General 33, % , % , % 35, % 35, % 35, % Information & Telcomm Systems 9, % , % , % 10, % 10, % 10, % Sales & Marketing - 0.0% % % - 0.0% - 0.0% - 0.0% - - Franchise Fees 93, % ,678 95, % ,712 97, % 98, % 98, % 98, % ,764 Utilities 37, % , % , % 39, % 39, % 39, % Property Operations & Maintenance 7, % , % , % 7, % 7, % 7, % Total Undistributed 182, % , , % , , % 191, % 191, % 191, % ,428 Fixed Expenses Taxes (1) 12, % , % , % 12, % 12, % 12, % Insurance (2) 19, % , % , % 20, % 21, % 21, % Total Fixed 31, % , % , % 33, % 34, % 34, % Net Operating Income 384, % , , % , , % 404, % 403, % 402, % ,194 Footnotes: Expense ratios are based on current year ratio to sales unless noted below. (1) R.E. Tax increase per year is estimated at 1.0%. (2) Insurance increase per year is esimated at 2.5%. 22

27 5-YEAR IRR Purchase Price 2,980,000 PIP ($0,000/Room est.) - Total Investment 2,980,000 Down Payment 20.0% 596,000 Number of Rooms 56 Cost per Room (Sale Price/Total Investment) 53,214 53,214 Room Revenue Multiple Total Investment Cap Rate (Current & Pro Forma) 12.9% 13.2% 13.4% 13.6% 13.5% 13.5% FIRST MORTGAGE Mortgage Amount 2,384,000 Interest Rate 5.50% Amortization Period (years) YEARLY CASH FLOW T12 MAY 2017 Year One Year Two Year Three Year Four Year Five Net Operating Income 384, , , , , ,884 First Mortgage Annual Payment (175,678) (175,678) (175,678) (175,678) (175,678) (175,678) Cash Flow after Debt Service 209, , , , , ,206 Debt Coverage Ratio Debt Yield 16.1% 16.5% 16.8% 17.0% 16.9% 16.9% CAPITAL GAIN CALCULATION Terminal Cap Rate 12.9% 10.6% 10.7% 10.8% 10.9% 11.0% Property Value 2,980,000 3,703,561 3,742,961 3,742,559 3,702,271 3,662,585 Selling Costs 6.0% Net Proceeds 3,442,830 Price per Room 53,214 66,135 66,839 66,831 66,112 65,403 LEVERAGED IRR Year Zero Year One Year Two Year Three Year Four Year Five Equity (596,000) Cash Flow after Debt Service 216, , , , ,206 Sale Proceeds 3,442,830 Remaining First Mortgage Balance (2,128,233) Net Cash Flow (596,000) 216, , , ,869 1,541,803 Cash on Cash Return 36.4% 37.7% 38.3% 38.2% 38.1% Cash plus Debt Reduction Return 44.1% 45.8% 46.9% 47.3% 47.7% Five-Year Leveraged IRR 47.1% Average Cash on Cash Return 37.8% 23

28

29

30 Over the past twelve months, the property recorded an average occupancy index of 139.3% and an ADR index of 91.2%, resulting in a RevPAR penetration index of 127.1%. SET NAME CITY, STATE ROOMS OPEN DATE BRAND RANKING* GUEST RANKING** RACK RATES*** Days Inn Lake Village Lake Village, AR 56 May of 7 1 of 2 $64 $64 Days Inn Greenville Greenville, MS 120 Dec 1985 Equal 6 of 9 $69 $69 Econo Lodge Greenville Greenville, MS 77 Apr 1995 Equal 4 of 9 $55 $63 Rodeway Inn Greenville Greenville, MS 108 Jan 1997 Equal 5 of 9 $53 $53 Super 8 McGehee McGehee, AR 27 Jun 1995 Equal 1 of 2 $61 $61 Americas Best Value Inn & Suites Star City Star City, AR 45 Jan 2003 Equal 1 of 1 $62 $62 Holiday Inn Express & Suites Greenville Greenville, MS 73 Jul 2005 Superior 1 of 9 $113 $123 Total 506 Comp Rooms 450 Footnote: * Smith Travel Research Brand Ranking ** Guest Ranking *** Rate Survey: MAR & AUG 26

31 MAP Days Inn Lake Village Days Inn Greenville Econo Lodge Greenville Rodeway Inn Greenville 4 Super 8 McGehee 4 5 Americas Best Value Inn & Suites Star City 6 Holiday Inn Express & Suites Greenville

32 912 SOUTH HIGHWAY 65 & 82 LAKE VILLAGE, AR DAYS INN GREENVILLE 2701 HIGHWAY 82 EAST GREENVILLE, MS ECONO LODGE GREENVILLE 3080 HIGHWAY 82 EAST GREENVILLE, MS Total Rooms 56 Year Built Renovated AAA Rating N/A Meeting Rooms 1 Meeting Space 100 People Brand Ranking 2 of 7 Rack Rates $64 $64 AMENITIES Heated Outdoor Pool םם Total Rooms 120 Year Built Renovated AAA Rating N/A Meeting Rooms 1 Meeting Space 20 People Brand Ranking Equal Rack Rates $69 $69 AMENITIES Meeting Room םם Total Rooms 77 Year Built Renovated AAA Rating Meeting Rooms Meeting Space Brand Ranking N/A N/A N/A Equal Rack Rates $55 $63 AMENITIES Seasonal Outdoor Pool םם Business Center םם Heated Outdoor Pool םם Complimentary Breakfast Buffet םם Meeting Room םם Fitness Center םם Pet Friendly Hotel םם Complimentary Breakfast Buffet םם Free Wireless Internet Access םם Complimentary Breakfast Buffet םם Free Wireless Internet Access םם Guest Laundry Facilities םם Accessible Rooms Available םם Guest Laundry Facilities םם Guest Laundry Facilities םם Free Onsite Parking םם 28

33 RODEWAY INN GREENVILLE 137 NORTH WALNUT STREET GREENVILLE, MS Total Rooms 108 Year Built Renovated AAA Rating N/A Meeting Rooms 1 Meeting Space Brand Ranking 50 People Equal Rack Rates $53 $53 AMENITIES Business Center םם SUPER 8 MCGEHEE 1202 HIGHWAY 65 NORTH MCGEHEE, AR Total Rooms 27 Year Built Renovated 2005 AAA Rating Two Diamonds Meeting Rooms 1 Meeting Space Brand Ranking N/A Equal Rack Rates $61 $6 AMENITIES Meeting Room םם AMERICAS BEST VALUE INN & SUITES STAR CITY 1308 NORTH LINCOLN AVENUE STAR CITY, AR Total Rooms 45 Year Built 2003 AAA Rating N/A Meeting Rooms 1 Meeting Space Brand Ranking 35 People Equal Rack Rates $62 $62 AMENITIES Meeting Room םם Complimentary Breakfast Buffet םם Business Center םם Business Center םם Free Wireless Internet Access םם Heated Outdoor Pool םם Heated Outdoor Pool םם Guest Laundry Facilities םם Pet Friendly Hotel םם Complimentary Breakfast Buffet םם Free Wireless Internet Access םם Complimentary Breakfast Buffet םם Free Wireless Internet Access םם Accessible Rooms Available םם 100% Smoke-Free Hotel םם Guest Laundry Facilities םם 29

34 140 High & Low Rack Rates HOLIDAY INN EXPRESS & SUITES GREENVILLE 3090 HIGHWAY 82 EAST GREENVILLE, MS 20 Total Rooms 73 Year Built 2004 AAA Rating Three Diamonds Meeting Rooms 1 Meeting Space 35 People Brand Ranking Superior Rack Rates $113 $123 AMENITIES Seasonal Outdoor Pool םם Fitness Center םם 0 Days Inn Lake Village Days Inn Greenville Econo Lodge Greenville Rodeway Inn Greenville Super 8 McGehee Americas Best Value Inn & Holiday Inn Express & Suites Suites Star City Greenville Low High Linear (Market Average) Average Rack Rates 140 Name City, State Rooms OpenDate Brand Ranking * st Rankinack Rates * Days Inn Lake Village, AR 56 May of 7 1 of Lake Village 2 Days Inn Greenville Greenville, MS 120 Dec 1965 Equal 6 of Econo Lodge Greenville Greenville, MS 77 Apr 1995 Equal 4 of Rodeway Inn Greenville Greenville, MS 108 Jan 1997 Equal 5 of Super 8 McGehee McGehee, AR 27 Jun 1995 Equal 1 of Americas Best Value Inn & Suites Star City Star City, AR 45 Jan 2003 Equal 1 of Holiday Inn Express & Suites Greenville Greenville, MS 73 Jul 2005 Superior 1 of Total Comments: Comp Rooms 450 * Smith Travel Research brand ranking ** w w w.tripadvisor.com guest ranking *** Rate Survey: JAN & JUL 80 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the inform Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do 60 property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap. Meeting Room םם 40 Business Center םם Complimentary Breakfast Buffet םם Free Wireless Internet Access םם 20 0 Days Inn Lake Village Days Inn Greenville Econo Lodge Greenville Rodeway Inn Greenville Super 8 McGehee Americas Best Value Inn & Holiday Inn Express & Suites Suites Star City Greenville Average Linear (Market Average) 30

35

36

37

38 CHICOT COUNTY, ARKANSAS Geography Chicot County is Arkansas tenth county and named after Point Chicot on the Mississippi River. Surrounding the county is Lake Chicot, which is 22 miles long. Chicot County is the state s southeastern most county and is well known for its rich, fertile soil. The county has a total area of 691 square miles, of which 644 square miles is land and 47 square miles is water. The county seat is Lake Village. Area attractions include exhibits at the Lake Chicot Pumping Plant, a $90-million facility built to protect the lake s water quality, the Museum of Chicot County, and the Plantation Bed and Breakfast, located in a farm house where Confederate wounded were treated during the 1864 Battle of Ditch Bayou. Just north of downtown, an historic marker records the site where in 1923 Charles Lindbergh made his first nighttime flight. From the Arkansas Festival Association, the festival received the 1993 Festival of the Year award. Festival funds keep Dermott viable during challenging shifts in the economic structure. The Lake Chicot Fall Festival is a two day annual event in October located in downtown Lake Village. The festival offers food and games, a carnival, live gospel entertainment, a dog show, BBQ competition, 5K run/walk, baking contest and a car show. Infrastructure The Lake Village Municipal Airport is a city-owned general aviation airport in Southeast Arkansas. Located 2 miles west of the city center, the airport is served by one runway. Major U.S. Routes 65, 82, and 278 run through the entire county. In 2016, The U.S. Department of Commerce announced the investment of $380,000 to make critical railroad infrastructure improvements in Chicot County. Since Hurricane Gustav in 2008, two more instances of major flooding have impacted businesses and jobs in the region. The railroad drainage improvements made under this grant will run from Lake Village to the Arkansas/Louisiana state-line in Chicot County Annual Events One of Arkansas most successful festivals, the award winning Dermott Crawfish Festival, is a free event held in the city of Dermott. Every third weekend of May, Dermott transforms its downtown streets into an entertainment district. The festival is filled with crawfish eating, food vendors, arts & crafts, live bands, horseshoe pitching, fire truck rides, a beauty pageant and carnival games. The Dermott Crawfish Festival has received numerous awards and honors. Major Employers Superior Uniform Group, Inc. Lakeside School District Eudora School District McDonalds Corporation, Inc. Paul Michael Company Chicot Memorial Medical Center Dermott School District Dermott City Nursing Home Southeast Rehabilitation Hospital Southeast Foods, Inc. 34

39

40 DEMOGRAPHIC POPULATION 1 MILE 3 MILES 5 MILES 2000 Population 1,847 3,293 4, Population 1,726 3,002 3, Population 1,642 2,850 3, Population 1,588 2,747 3,604 HOUSEHOLDS 1 MILE 3 MILES 5 MILES 2000 Households 761 1,270 1, Households 751 1,221 1, Households 712 1,160 1, Households 701 1,134 1,501 INCOME 1 MILE 3 MILES 5 MILES $0-$14, % 28.1% 26.0% $15,000-$24, % 15.6% 15.1% $25,000-$34, % 13.8% 14.4% $35,000-$49, % 14.7% 15.0% $50,000-$74, % 12.6% 13.3% $75,000-$99, % 6.3% 6.8% $100,000-$124, % 3.1% 3.6% $125,000-$149, % 2.1% 2.0% $150,000-$199, % 1.9% 1.7% $200,000-$249, % 0.7% 0.7% $250, % 1.3% 1.4% 2014 Median Household Income $29,729 $30,638 $31, Per Capita Income $19,469 $18,920 $20, Average Household Income $44,007 $45,861 $47, Average Household Size Daytime Population 735 1,297 1, Owner Occupied Housing Units 53.41% 56.28% 58.73% 2000 Renter Occupied Housing Units 35.52% 30.96% 27.99% 2000 Vacant 11.07% 12.76% 13.28% 2014 Owner Occupied Housing Units 52.72% 60.22% 63.97% 2014 Renter Occupied Housing Units 47.28% 39.78% 36.03% 2014 Vacant 15.26% 16.82% 18.06% 2019 Owner Occupied Housing Units 52.31% 59.72% 63.51% 2019 Renter Occupied Housing Units 47.69% 40.28% 36.49% 2019 Vacant 15.84% 17.44% 18.76% 36

41 DEMOGRAPHIC Population In 2014, the population in your selected geography is 3,735. The population has changed by % since It is estimated that the population in your area will be 3,603 five years from now, which represents a change of -3.52% from the current year. The current population is 47.88% male and 52.11% female. The median age of the population in your area is 42.1, compare this to the Entire US average which is The population density in your area is people per square mile. Households There are currently 1,536 households in your selected geography. The number of households has changed by -9.51% since It is estimated that the number of households in your area will be 1,500 five years from now, which represents a change of -2.35% from the current year. The average household size in your area is 2.37 persons. Income In 2014, the median household income for your selected geography is $31,911, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 24.42% since It is estimated that the median household income in your area will be $37,389 five years from now, which represents a change of 17.16% from the current year. The current year per capita income in your area is $20,180, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $47,618, compare this to the Entire US average which is $74,533. Race & Ethnicity The current year racial makeup of your selected area is as follows: 48.91% White, 45.70% Black, 0.01% Native American and 0.67% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 4.90% of the current year population in your selected area. Compare this to the Entire US average of 17.13%. Housing In 2000, there were 1,150 owner occupied housing units in your area and there were 548 renter occupied housing units in your area. The median rent at the time was $273. Employment In 2014, there are 1,592 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 59.39% of employees are employed in white-collar occupations in this geography, and 40.86% are employed in blue-collar occupations. In 2014, unemployment in this area is 10.53%. In 2000, the average time traveled to work was 24.9 minutes. 37

42 EXCLUSIVELY LISTED BY: JAKE YEE Associate ONTARIO OFFICE (909) License: CA GORDON ALLRED First Vice President Investments Senior Director, National Hospitality Group ONTARIO OFFICE (909) License: CA OFFERING MEMORANDUM OFFICES THROUGHOUT THE U.S. AND CANADA