Lodging Transaction Market Key 2016 Themes Transaction activity started slowly in 2016 primarily due to choppiness in the broader capital markets space. CMBS market dislocation has resulted in lower leverage, which directly impacts pricing. The capital markets started to stabilize in the 2Q and transaction volume should increase. Pricing for hotels is down roughly 5-10% from this time last year largely due to the disconnect in the capital markets. Fundamentals remain strong. More dry powder than ever chasing real estate. Supply a major concern in many top markets like New York, but not an issue in Tampa, which ranks 36 th in the U.S. for its construction pipeline. Hotel construction financing and development equity also extremely difficult to find which should mute new supply both nationally and locally. For Example Stabilized Hotels 1Q 2015: Leverage: 75% Rate: ±4.0%-4.5% Fixed 1Q 2016: Leverage: 60-65% Rate: ±5.5% Fixed Today: Leverage: 60-65% Rate: ±5.0%-5.25% Fixed We s t s h o r e H o t e l O v e r v i e w 2
Tampa s Growth Story vs. Top U.S. Lodging Markets Through YE 2015, Tampa validated its impressive rate of recovery to become a nationally leading hotel market with robust growth supported by strong fundamentals. In the below charts, Smith Travel Research reported performance metrics for the Top 25 U.S. lodging markets. Tampa ranked #1 in both Occupancy and RevPAR growth, as well as #4 in ADR growth. Rank Top 25 US Markets ADR % Growth 1 Nashville, TN $126.67 8.7% 2 Phoenix, AZ $121.09 8.0% 3 Seattle, WA $148.45 7.8% 4 Tampa/St Petersburg, FL $114.56 7.7% 5 Los Angeles/Long Beach, CA $158.37 7.5% 6 Denver, CO $120.78 7.4% 7 San Francisco/San Mateo, CA $222.90 7.1% 8 Atlanta, GA $97.78 6.4% 9 Anaheim/Santa Ana, CA $143.98 6.2% 10 Boston, MA $188.08 6.2% 11 San Diego, CA $150.73 6.1% 12 Chicago, IL $142.69 5.9% 13 Miami/Hialeah, FL $195.75 5.9% 14 Dallas, TX $98.91 5.7% 15 Detroit, MI $94.14 5.5% 16 Orlando, FL $112.00 4.8% 17 Philadelphia, PA-NJ $128.01 4.3% 18 Minneapolis/St Paul, MN-WI $112.17 4.2% 19 St Louis, MO-IL $99.03 3.5% 20 Norfolk/Virginia Beach, VA $94.45 3.3% 21 Washington, DC-MD-VA $149.64 3.0% 22 Oahu Island, HI $219.55 3.0% 23 New Orleans, LA $148.20 2.3% 24 Houston, TX $108.63 1.6% 25 New York, NY $259.11-1.6% Rank Top 20 US Markets Occupancy % Growth 1 Tampa/St Petersburg, FL 71.8% 5.6% 2 Phoenix, AZ 65.9% 4.4% 3 Dallas, TX 70.6% 4.1% 4 Orlando, FL 77.0% 4.1% 5 Norfolk/VA Beach, VA 57.0% 4.0% 6 Anaheim/Santa Ana, CA 78.7% 3.0% 7 Atlanta, GA 69.9% 2.7% 8 San Diego, CA 76.4% 2.4% 9 Washington, DC-MD-VA 70.7% 2.3% 10 Nashville, TN 73.5% 2.2% 11 St Louis, MO-IL 65.4% 1.8% 12 Boston, MA 76.5% 1.5% 13 Minneapolis, MN-WI 68.4% 1.5% 14 Los Angeles, CA 79.7% 1.2% 15 Philadelphia, PA-NJ 68.2% 1.2% 16 Oahu Island, HI 85.3% 1.1% 17 Chicago, IL 70.0% 1.0% 18 Detroit, MI 65.8% 1.0% 19 New Orleans, LA 69.7% 1.0% 20 Seattle, WA 76.2% 0.9% 7.7% ADR GROWTH 5.6% OCC. GROWTH 13.8% REVPAR GROWTH Rank Top 25 US Markets RevPAR % Growth 1 Tampa/St Petersburg, FL $82.28 13.8% 2 Phoenix, AZ $79.77 12.8% 3 Nashville, TN $93.11 11.1% 4 Dallas, TX $69.81 10.0% 5 Anaheim/Santa Ana, CA $113.31 9.4% 6 Atlanta, GA $68.40 9.3% 7 Orlando, FL $86.19 9.1% 8 Los Angeles/Long Beach, CA $126.19 8.8% 9 Seattle, WA $113.14 8.8% 10 San Diego, CA $115.11 8.6% 11 Boston, MA $143.81 7.9% 12 Denver, CO $91.41 7.9% 13 San Francisco/San Mateo, CA $188.05 7.5% 14 Norfolk/Virginia Beach, VA $53.87 7.4% 15 Chicago, IL $99.88 6.9% 16 Detroit, MI $61.91 6.6% 17 Miami/Hialeah, FL $152.83 6.0% 18 Minneapolis/St Paul, MN-WI $76.72 5.8% 19 Philadelphia, PA-NJ $87.24 5.5% 20 Washington, DC-MD-VA $105.75 5.4% 21 St Louis, MO-IL $64.73 5.3% 22 Oahu Island, HI $187.32 4.1% 23 New Orleans, LA $103.30 3.4% 24 New York, NY $219.39-1.7% 25 Houston, TX $74.42-3.3% Source: Smith Travel Research, PKF Hospitality Research, Lodging Econometrics We s t s h o r e H o t e l O v e r v i e w 3
Tampa/St. Petersburg Fundamental Performance Tampa had a breakout year in 2015 with RevPAR growth leading the nation at 13.8%. As of YE 2015, the Tampa/St. Petersburg lodging market s ADR is 7% above the prior peak experienced in 2008. Similarly, at 71.8%, occupancy is 8% above the prior peak of 66.4% seen in 2005. The lower-priced hotel segment is buoying overall numbers with 2015 ADR up 9.7% and occupancy up 6.3% (+16.6% RevPAR). Forecasts for 2016 predict another robust year with a RevPAR increase of 7.9%, driven by ADR growth. Tampa/St. Petersburg Long Run Average Metrics (1988 2015) Occupancy: 61.9% ADR Change: +2.9% RevPAR Change: +3.6% Source: Smith Travel Research, PKF Hospitality Research, Lodging Econometrics We s t s h o r e H o t e l O v e r v i e w 4
Broader Institutionalization of the Investor Pool Investors that have found themselves priced out of South Florida are turning their attention to secondary markets such as Tampa and Orlando. Tampa s strong corporate presence, high-growth lodging fundamentals, and robust population growth have attracted the who s who of institutional ownership. We s t s h o r e H o t e l O v e r v i e w 5
Tampa Tourism Continues to Thrive Hillsborough County recorded a 7% year-over-year increase in visitation with 20.3 million domestic and 514,000 international visitors in 2014. The State of Florida set its fifth consecutive record year for tourism in 2015 with over 105 million visitors. Visitor spending in 2014 reached $3.5 billion for Hillsborough County, which represents an 8% increase over the prior year. Spending from international visitors is growing at more than double the rate of the domestic market. Some of the major citywide events which will have a significant impact on visitation and spending include the 2016 NCAA Frozen Four Hockey Tournament, 2017 NCAA College Football National Championship, and the New York Yankees Fantasy Camp, among many others. Hillsborough County Tourism and Visitor Expenditure 22.0 $3.6 20.0 18.0 16.0 14.0 $3.2 $2.8 $2.4 12.0 2009 2010 2011 2012 2013 2014 $2.0 Source: Visit Tampa Bay Visitors (M) Tourist Expenditure ($B) We s t s h o r e H o t e l O v e r v i e w 6
International Airport Volumes on Upward Trajectory Tampa International Airport (TPA), ranked #2 Airport in the US by Travel + Leisure (2013), is the 29 th busiest in the nation with 18.5 million total enplanements annually. International ridership has increased an impressive 52.2% since 2010. The airport is currently wrapping up a $1 billion capital improvement project that will expand its capacity to 35 million passengers per year. If the disproportionate growth of international ridership versus domestic continues, this bring millions of new international travelers to the Tampa/ St.Pete/Clearwater MSA. February 2016 marked St. Petersburg/Clearwater International Airport s busiest in history with 137,907 passengers (18% over Feb 2015). PIE has grown passenger traffic by an impressive 63% in just two years to over 1.6 million annual passengers. PIE is the largest and busiest U.S. Coast Guard Air Station in the nation. Source: Tampa Int l Airport, St. Petersburg/Clearwater Int l Airport Three destinations are scheduled to start service with Allegiant in 2016: Dayton, OH and Flint, MI in April and New Orleans, LA in June. We s t s h o r e H o t e l O v e r v i e w 7
Westshore Lodging Submarket At a Glance Tampa/St. Petersburg ranked #1 out of the Top 25 U.S. Lodging Markets with 13.8% RevPAR growth in 2015. According to PKF Hospitality Research, Tampa/St. Petersburg is projected to continue improving RevPAR by 7.9% and 7.1% in 2016 and 2017, respectively. This growth is primarily driven by ADR. The Westshore submarket has grown RevPAR by over 53% since 2011, which represents an 11.3% CAGR. Westshore leads all Tampa submarkets with 76.5% average occupancy. USA Lodging Market 2013 2014 2015 % Change '14-15 Occupancy 62.2% 64.4% 65.6% 1.9% ADR $110.30 $114.92 $120.01 4.4% RevPAR $68.58 $74.04 $78.67 6.3% Florida Lodging Market 2013 2014 2015 % Change '14-15 Occupancy 66.8% 69.8% 72.0% 3.2% ADR $118.21 $124.15 $131.45 5.9% RevPAR $78.92 $86.61 $94.64 9.3% Tampa-St. Petersburg Lodging Market % Change 2013 2014 2015 '14-15 Occupancy 64.3% 68.0% 71.8% 5.5% ADR $100.44 $106.39 $114.56 7.7% RevPAR $64.59 $72.33 $82.28 13.8% Source: Smith Travel Research Westshore Lodging Submarket % Change '11-15 % Change '14-15 2011 2012 2013 2014 2015 Occupancy 67.5% 70.6% 71.0% 73.9% 76.5% 13.3% 3.5% ADR $91.46 $97.09 $96.15 $104.33 $112.20 22.7% 7.5% RevPAR $56.04 $68.51 $68.29 $77.13 $85.83 53.2% 11.3% We s t s h o r e H o t e l O v e r v i e w 8
Westshore YoY Comparison The Westshore lodging submarket continued its pace of double-digit RevPAR growth in 2015 with an 11.2% increase over the prior year. The submarket experienced a 12.9% increase in 2014. ADR led overall growth with a 7.5% increase over 2014; occupancy jumped from 73.9% to 76.5% over the same period. The RNC Effect 2014 Fundamentals: Occupancy 2015 Fundamentals: Occupancy ADR ADR RevPAR RevPAR Source: Smith Travel Research We s t s h o r e H o t e l O v e r v i e w 9
Submarket Performance Metrics Hillsborough County Westshore continues to track as the second best submarket in terms of RevPAR in the Hillsborough County behind downtown Tampa. While Westshore passed downtown in terms of occupancy in 2012, the ADR will continue to trail downtown due to the disproportionate share of lower rated select service and extended stay hotels within the submarket. Source: Smith Travel Research We s t s h o r e H o t e l O v e r v i e w 10
Westshore Hotel Inventory Full Service We s t s h o r e H o t e l O v e r v i e w 11
Westshore Hotel Inventory Limited Service We s t s h o r e H o t e l O v e r v i e w 12
Downtown Hotel Inventory We s t s h o r e H o t e l O v e r v i e w 13
Westshore Brand Representation Number of Hotels by Flag Other/Independents 10 Hilton 8 Wyndham 3 Marriott 9 Choice 4 IHG 5 Starwood 2 We s t s h o r e H o t e l O v e r v i e w 14
Brand Opportunities Brands Not Represented Full Service Andaz Bulgari Conrad Curio Dream Edition Four Points Hotel Missoni JW Marriott Park Hyatt Park Plaza Planet Hollywood Radisson Ritz-Carlton St. Regis The Luxury Collection Tribute W Brands Added in Last 12 Months Full Service Limited Service Fairfield Inn & Suites Brands To Be Added Full Service Limited Service Cambria Suites Candlewood Suites Clarion EconoLodge Element Home 2 Suites Hotel Indigo Hyatt House MainStay Suites Marriott Executive Apartments Park Inn Rodeway Inn Sleep Inn Staybridge Suites Tryp Wingate Limited Service AC Hotel by Marriott We s t s h o r e H o t e l O v e r v i e w 15
Notable Trades in Westshore and Downtown Tampa Westshore Hotel Trades (Since 2013) Date Property Name Price in $ $/Units Buyer Seller Apr-16 Sheraton Suites Tampa $21,250,000 $81,418 Benjamin Mallah Square Mile Capital Partners Westshore Jan-16 Hampton Inn Veterans $7,400,000 $86,337 Jassas Capital Midland Loan Services Expressway - Airport North Dec-15 DoubleTree Tampa Airport - $40,000,000 $81,800 State of Florida Dept of Blackstone Westshore Transportation Oct-15 The Suites at Mainsail Village $39,000,000 $108,333 Abacus Capital Group Mainsail Development Jul-15 DoubleTree Tampa Airport - $35,700,000 $72,910 Blackstone GE Capital Real Estate Westshore Feb-15 Hyatt Place Tampa $19,620,191 $155,716 ARC Hospitality Trust Whitehall Real Estate Funds Feb-15 Hampton Inn $12,000,000 $90,226 Encore Hospitality GE Capital Real Estate Jan-15 InterContinental $40,200,000 $124,845 Arden Group Lowe Enterprises JV Oaktree Dec-14 Dec-14 Towneplace Suites Tampa Westshore Airport Residence Inn Tampa Westshore Airport $14,320,000 $117,377 Noble Investment Group McKibbon Hotel Group $21,397,000 $133,731 Noble Investment Group McKibbon Hotel Group Date Property Name Price in $ $/Units Buyer Seller Nov-15 Sheraton Riverwalk $37,500,000 $135,379 Insite Group Wells Fargo OBO Goldman Sachs Nov-15 Aloft Tampa Downtown $30,000,000 $222,222 Pharos Hospitality Convergent Capital Partners JV Liberty Group Dec-14 Courtyard Tampa $16,902,000 $119,872 Noble Investment Group McKibbon Hotel Group Downtown Nov-14 Hilton Garden Inn Tampa $14,884,051 $156,674 NorthStar Realty Finance JV Inland American REIT Sep-14 Tampa Marriott Waterside Hotel & Marina Source: HFF, Real Capital Analytics Tampa CBD Hotel Trades (Since 2013) Chatham Lodging Trust $199,000,000 $276,773 Jeff Vinik JV Cascade Investments JV Strategic Host Hotels & Resorts We s t s h o r e H o t e l O v e r v i e w 16
Westshore/Downtown Development Pipeline We s t s h o r e H o t e l O v e r v i e w 17
Westshore Lodging Market Going Forward Improving office market fundamentals, expanding corporate presence, and proximity to two international airports will lead to growing and sustained demand in the Westshore market. Westshore will be able to capitalize on the Tampa Bay region s ability to attract major events. The eventual exit of the DoubleTree will eliminate 480 rooms from the market, which should benefit submarket owners. Aging product may create opportunities for new development or redevelopment of existing assets. Some developers have already taken advantage as the Fairfield Inn and Suites, which opened in 2015 and Hampton Inn and Suites which opens later this year. An AC Marriott is also in the works We s t s h o r e H o t e l O v e r v i e w 18