Best Western Plus. Hiawatha, Kansas.

Best Western Plus Hiawatha, Kansas www.leisurerealestate.com

3 5 7 8 9 Executive Summary Summary of facts and conclusions regarding the subject s existing market position and investment potential. Property Profile Market Overview. Recap assimilation of independent publications, economic data, and surveys regarding the basic socioeconomic demographics and neighborhood characteristics. Pictures and maps are provided to assist reader in identification and visualization and are not intended for technical purposes. Community Profile Description of site, location, neighborhood and property improvements, includes opinion of existing physical condition, development history and support facilities. Financial Profile Condensed statement of Owner s Income Statement Results recast to the level of Net Income from Operations, (cash flow available to service mortgage debt and income taxes). Investment Recap

Best Western Plus 119 E Lodge Street Hiawatha, Kansas $4,795,000 Executive Summary 57 keys T-12 revenue $1,150,000 2016 NOI over $500,000 (including incentives) Microwaves and mini-fridges Opened 2013 KEYS 57 PRICE/KEY $84,122 Limited PIP expected Fitness room, indoor pool & hot tub Based on 2016 revenue, remaining incentives project to approx $1,750,000 3 Best Western Plus Hiawatha, Kansas

Best Western Plus 119 E Lodge Street Hiawatha, Kansas $4,795,000 Compelling Investment Considerations Only four years old and in excellent condition, the property is being offered for the first time Low transfer fee and low ongoing franchise/membership fees Performing well, generating $20k per room in revenue, with business still ramping up INCENTIVES! Two significant ongoing local incentives will be purchased with the property: Property Tax Abatement: Approximately 6 ½ years left on a 10 year tax abatement. This currently saves $70,000 per year in property taxes, which projects to over $420,000 over the remaining term Transient Guest Tax Reimbursement: Approximately 18 years remaining on a full 6% refund of Transient Guest Taxes (TGT) from the City. Based on current revenues, this projects to over $1,300,000 over the remaining term The proceeds of the tax abatement and TGT incentives, which will transfer to new ownership, go straight to the bottom line Excellent location at the very busy intersection of Highway 36 and Highway 73 in northern Kansas The property is situated next to a new McDonald s and a new Casey s 4 Best Western Plus Hiawatha, Kansas

Property Profile The Best Western Plus is ideally located at the intersection of Highway 36 and Highway 73 in northern Kansas. The property is only 4 years old and controls the hotel market in Brown County. Current ownership takes great pride in keeping their property up to date and it shows. The property has 57 rooms, several of which are suites and one whirlpool suite. Each room has a refrigerator and microwave. The hotel thus is able to serve a wide variety of clientele, from construction crews, families, businesspeople and travelers alike. Hotel amenities include a large breakfast room and lobby offer a community table as well as soft seating. The property also has a fitness room, meeting room, and indoor pool and hot tub. The Best Western Plus is ideally located on the south end of Hiawatha at the Highway 36 and 73 intersection. McDonald s and Casey s are both less than a block away and most of the recent development in Hiawatha has occurred within a couple of blocks of the hotel. King Double Queen Double Queen Bathroom 5

Property Profile Guestroom Amenities - Large TV s - Refrigerators - Microwaves - Several large suites - Free Wi-Fi Common Area Amenities - Fitness room - Business center - Continental breakfast - Guest laundry - Indoor pool & hot tub Indoor Pool Breakfast Seating Business Center Hot Tub 6

Community Profile Hiawatha, Kansas is located at the intersection of US Highways 36 and 73 in northeastern Kansas. It is located 41 miles from St. Joe, Missouri, and an hour and a half from Kansas City. Hiawatha is the county seat of Brown County, which has a population of 10,700. Hiawatha is known for its beautiful Maple trees that line its streets. Highway 36 has become a significant carrier of traffic traversing across northern KS. The Hiawatha motel market is limited. There are two other motels in town, neither of which is a direct competitor to the Best Western Plus. The Gateway Express is semi-closed and is in a bad case of disrepair. Thus, only the Sunflower Motel is still operating and provides a clean, but lower level style of hospitality experience than the Best Western Plus. For more information on Hiawatha, KS, please check out the following web sites: City of Hiawatha Hiawatha Chamber of Commerce & Convention & Visitors Bureau Brown County Hiawatha, KS Hiawatha, KS 7

Financial Profile Operating Statistics Now producing over $20,000 per key, the Best Western Plus continues to ramp up, suggesting that the hotel should have further room to grow. Year ADR Occupancy Revenue T-12 May 2017 + $6 + 3.4% $1,153,036 2016 $95.67 55.34% $1,104,518 2015 $88.10 52.77% $967,205 Recast Net Operating Income The following table is a recast summary of the owners operating statements. P&L s and Tax Returns are available to qualified buyers. Please contact the broker listed for more information. Owner Financial Statement Summary 2016 2015 2014 Revenue $1,083,077 $932,218 $852,297 Operating Expenses $692,752 $635,944 $535,360 Recast NOI $390,324 $296,273 $316,937 Municipal Incentives $127,293 $85,342 $90,915 Recast NOI After Incentives $517,618 $381,616 $407,853 Notes to Financial Summary: In the State of Kansas, individuals and/or corporations can t be granted tax abatement. Therefore, for the term of abatement, the City of Hiawatha is the figurehead owner. The hotel developer holds leasehold interest for the same term and controls the asset through the lease, which is Net in nature. (The developer has the liability and the city has no liability) Therefore, the ownership interest in this Offering is a leasehold interest for the remaining term of the tax abatement, then converts to fee simple when the bonds are retired (paid off). A purchaser will be required to hire bond counsel in order to guide the purchaser through the assumption of the lease and the transfer of bonds. Transfer of the lease and assumption of the bonds will also require City Council approval. All of the above are routine transactions in Kansas, and is a simple matter of navigating the requirements. As with the original development, the approval process is well worth the effort. In this case, however, the income stream has been proven, substantially reducing the risk compared to a new development. 8

Investment Recap The Best Western Plus is an excellent hotel and a very good investment all on its own. The hotel is continuing to ramp up and is now operating at greater than $20,000 per hotel room in revenue. The additional $1,750,000 in projected remaining incentives add significantly to the value of the asset. Thus, the Best Western Plus offers great upside and opportunities to either an owner/operator or an investor. The Best Western also offers the benefits that come with Best Western membership, including lower fee/dues than competing brands and a lower transfer fee. Plus, the Best Western Plus is only 4 years old! It is certainly the nicest hotel on 36 Hwy, as it crosses Kansas. Just as it was for the current owner, we believe that this Property is a very attractive long term investment in a consistently strong market. The buyer of this hotel should experience immediate cash flow, and we believe the property will continue to provide good income for years to come. For more information or discussion, please call or email: Mike Works Senior Investment Advisor 402-416-3522 mikeworks@windstream.net 9