Offering Summary DOWNTOWN SAN DIEGO / BAYFRONT Holliday Fenoglio Fowler, L.P. ( HFF ) a licensed Colorado real estate broker. Holliday GP Corp. ("HFF"), a California licensed real estate broker, California License #01385740.
2 Offering Summary HFF
Investment Overview HFF has been exclusively retained to offer the opportunity to acquire the dualbranded Residence Inn & SpringHill Suites San Diego Downtown/Bayfront (the Hotel or Property ), a 400-key hotel situated on approximately 5.2 acres of irreplaceable waterfront real estate on San Diego Bay. The Property benefits from its strategic positioning in Downtown San Diego, adjacent to over 35 million square feet of office space and walking distance from many of America s Finest City s famous amenities including Historic Gaslamp Quarter, Seaport Village, Petco Park, San Diego Convention Center, Midway Aircraft Carrier Museum and Little Italy. This unique Hotel, built in 2016 and designed by renowned architectural firm John Portman & Associates, presents a rare opportunity to acquire a leasehold interest in a strong cash flowing asset at the epicenter of one of the most stable lodging markets nationwide. Hotel Address 900 Bayfront Ct, San Diego, CA 92101 Built February 2016 Guest Rooms Stories 17 Total Meeting Space 400 total guest rooms (Residence Inn - 147 suites; SpringHill Suites - 253 suites) 8 meeting rooms, 11,397 SF of total indoor and outdoor meeting space including the 1,670 SF Ted Williams Room overlooking San Diego Bay Food & Beverage Beach Hut Deli Ryan Bros. Coffee Complimentary hot breakfast buffet Amenities Parking Retail Management / Franchise Outdoor pool, state-of-the-art fitness facility, The Market, 24/7 business center, complimentary Wi-Fi, kitchen amenities (Residence Inn guest rooms only) 414 stall garage 26,545 SF NRA Marriott brand managed (expires December 2047); Opportunity to convert to franchise in January 2021 Interest Port Leasehold (expires April 2080) Labor Partial union operations (including Housekeeping and Food & Beverage) HFF Offering Summary 3
Investment Highlights World-Class, Waterfront Downtown San Diego Location The Hotel s irreplaceable, waterfront location in Downtown s North Embarcadero places it at the epicenter of San Diego s corporate, cultural and entertainment districts. Located immediately adjacent to the heart of San Diego s central business district, the Hotel is within a short walk to many of San Diego s amenities including Historic Gaslamp Quarter, Seaport Village, Petco Park, San Diego Convention Center, Midway Aircraft Carrier Museum and Little Italy. The Property is also conveniently located within close proximity to the recently expanded San Diego International Airport. Market-Leading Physical Attributes The February 2016 delivery of the Residence Inn & SpringHill Suites San Diego Bayfront marked the first dual-branded hotel in Southern California. Utilizing post-tension slabs with window wall construction, the Hotel s build is best-in-class and will withstand the test of time. Unique in its own right, the Property offers a cutting-edge design, spectacular bay and city skyline views, fifth-floor outdoor swimming pool, bayfront patio area and a state-of-the-art fitness center. The Property s 11,397 square feet of indoor and outdoor meeting space includes the Ted Williams Room and Bayview Terrace which overlook the U.S.S. Midway and present panoramic views of San Diego Bay from the Coronado Bridge to Point Loma. View from Ted Williams Meeting Space 4 Offering Summary HFF
Strength of Marriott Affiliation & Management In September 2016, Marriott International completed its acquisition of Starwood Hotels & Resorts, creating the world s largest hotel company. Post-acquisition, Marriott International now offers the most comprehensive portfolio of brands and a significant global footprint, with over 6,500 properties and 1.1 million rooms in over 127 countries. With access to both Marriott and Starwood s award-winning loyalty programs, the Residence Inn & SpringHill Suites leverage the newly-merged company s visibility and recognition to access 110+ million loyalty members. The Hotel currently operates under a 30-year operating agreement that runs through December 2047 and is assumable upon sale. In addition, a new owner has the opportunity to convert the Hotel to a franchise in January 2021. GM OF THE YEAR FOR SPRINGHILL SUITES Institutional Asset with Strong In-Place Cash Flow The Hotel offers investors the rare opportunity to acquire a best-in-class asset with strong in-place cash flow. Since opening in February 2016, the Hotel has experienced tremendous top and bottom line performance. The Property also offers an investor substantial upside potential through continued ramp up, strategic capital initiatives and the continued growth of North Embarcadero and San Diego s lodging market. The Hotel offers a diverse income stream consisting of hotel, parking and retail revenues. A new buyer will benefit from meaningful top-line growth as each component continues to ramp up towards stabilization. RECENT TENANTS THAT HAVE MIGRATED DOWNTOWN HFF Offering Summary 5
5 94 CONVENTION CENTER 5 HORTON PLAZA GAS L QUA AMP RTE R HT LIG I RA L RESIDENCE INN & SPRINGHILL SUITES DOWNTOWN SAN D I E G O / B AY F R O N T AIL HT R LIG BRIC PHASE II 400-KEY I N T E R C O N T I N E N TA L S A N TA F E DEPOT WAT E R F R O N T PA R K OVER $10.4 BILLION # 5 CI T Y S PE NT BY OV E R 34.9 M I LLI ON VISI TOR S TOP MEETING D E S T I N AT I O N I N U S 6 Offering Summary HFF Cvent 22.1 MILLION PLANE PA S S E N G E R S 3.6% REVPAR G ROW T H 7th Nationally in RevPAR
C O R O N A D O B R I D G E SEAPORT VILLAGE Downtown San Diego A Thriving Urban Metropolis Downtown San Diego is in the midst of an unprecedented revitalization with billions of dollars in private and public investments funding commercial, residential and infrastructure development. The transformation of San Diego s CBD is establishing Downtown as a preferred 24-7 location with strong corporate migration appeal. Technology has become one of the more prevalent industries Downtown as new tenants enter the market, and existing tenants expand. Since 2014, over 1.25 million square feet of tech tenants have migrated Downtown USS MIDWAY MUSEUM Diverse Economy with Strong Base #1 startup city Forbes Magazine #5 city for fast growing companies Inc. Magazine #3 city for millennials Nielson #3 venture capital received by biotech firms PwC #1 concentration of military / defense assets in the world San Diego Military Advisory Council Favorable Port of San Diego Lease Structure The Property currently sits on a 66 year lease with the Unified Port of San Diego. With 62 years remaining and favorable terms allowing for the Property s full ramp-up, a new investor can own long-term one of Downtown San Diego s most institutional-quality hotels while generating attractive yields and returns. HFF Offering Summary 7
Bayview Terrace Reconcepting Opportunity The fifth floor of the Hotel presents a new investor with a unique opportunity to reconcept the outdoor deck into an irreplaceable outdoor food and beverage venue overlooking San Diego Bay and the USS Midway Aircraft Carrier Museum. This project would present a new buyer with the opportunity to redevelop an under-utilized outdoor space into an outdoor venue that would allow the Hotel to capture a better mix of group business, in addition to the transient demand it would organically generate. This opportunity would add significantly to the Hotel s top and bottom line. Continued Renaissance of North Embarcadero The delivery of the Residence Inn & SpringHill Suites marked the completion of Phase I of the Port of San Diego s North Embarcadero Visionary Plan at the former site of Lane Field Ballpark, commonly referred to as BRIC (intersection of Broadway and Pacific Highway). On the southern half of BRIC, the luxury-positioned 400-key Intercontinental Hotel is set to be delivered in September 2018, as well as additional retail, as part of Phase 2 of the Port s Plan. With significant leasing momentum already present, the final lease-up of Phase I and the completion of Phase II of the BRIC will further fortify this Property as a centerpiece of North Embarcadero. Significant residential and commercial development continues in North Embarcadero, making this Downtown s hottest submarket. These aspects all support meaningful long-term growth for this strategically located waterfront Hotel. 8 Offering Summary HFF
Investment Contacts SCOTT HALL Managing Director (858) 812-2355 shall@hfflp.com CA Lic # 01917029 TONY MALK Managing Director (310) 407-2127 tmalk@hfflp.com CA Lic # 01810668 AARON LAPPING Real Estate Analyst (858) 812-2368 alapping@hfflp.com CA Lic # 02027729 Financing Advisor TIM WRIGHT Senior Managing Director (858) 812-2341 twright@hfflp.com CA Lic # 00947194 hfflp.com Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.